High fuel prices spark panic in rural Alaska villages
Published Wednesday, June 4, 2008
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Stumble It!ANCHORAGE -- Village electric utilities in rural Alaska, panicked over the sky-high cost of fuel arriving on the summer's first barges, are appealing to the state for help.
The fuel bill for the Alaska Village Electric Cooperative, which serves 53 small villages in the west of the state, is leaping from $14 million last year to $26 million. That cost will be reflected in electricity rate increases that some villagers cannot afford, said Meera Kohler, the co-op's president.
In the village of Eek, for example, residents are looking at electric bills increasing another one-third to one-half. Eek, near the mouth of the Kuskokwim River, has an average household income of only $17,500, according to the federal census. Many families already have a hard time paying electric bills that run to $300 a month, said city clerk Fritz Petluska.
"There's quite a few families that designate one of their Permanent Fund checks to AVEC," Petluska said. "I think in most villages, that's what's going on."
In the middle-Yukon village of Ruby, a non-AVEC village with some of the most expensive power in Alaska, some families pay $900 a month for electricity, said tribal administrator Pat Sweetsir. They're the low-income villagers who live in federal HUD houses, with heat tapes on the pipes and electric stoves, he said.
And that was the price of electricity when they were burning last winter's diesel. Now that the season's first fuel barge has unloaded, the price of diesel just jumped $3 to $7.50 a gallon, Sweetsir said.
"They're just up against the wall," he said. "People are talking about moving to town."
On May 23, the AVEC co-op board declared a fuel emergency.
"It's simply incomprehensible," Kohler said. Residents get hit badly, even with an existing state subsidy, she said. And that subsidy isn't available to the village store. "What's going to happen to the businesses and the cities? It's going to be a huge hit for them -- at least double or triple what they've been paying."
Gov. Sarah Palin's recent offer of statewide energy assistance, while appreciated, doesn't provide the immediate aid that rural utilities need, Kohler said.
Palin's energy plan
Kohler wrote Palin last week, asking the governor to scrap her new energy debit-card idea in favor of a new plan that would directly subsidize the cost of fuel, both for utilities and individual consumers.
The AVEC plan would drop the price of diesel for utilities to around $1.40. That's still about two-and-a-half times more money than Chugach Electric pays to generate electricity, Kohler said.
The proposal also calls for a subsidy paid to gasoline suppliers, with consumers prices at the pump held to an artificially low price of around $1.80 a gallon.
Such a plan would share the windfall of Alaska's high oil-tax income to both urban and rural residents and be simpler to manage than the governor's proposed debit-card system, Kohler said.
The Palin administration is modifying its plan and will consider the AVEC suggestions along with others, said state energy coordinator Steve Haagenson. Palin wants lawmakers to approve her plan so assistance will be available by the fall.
Reaction around the state so far to the Palin plan has been strongly positive from rural Alaska and less positive in nonrural areas, where the sense of crisis is less strong, Haagenson said.
"We're going to try to find something that's fair to all Alaskans," he said. "My biggest concern is about the village economies. The cost is increasing so fast that all their disposable income is gone. They're down to survival mode."
The AVEC idea will also be discussed this week at a meeting of the Alaska Power Association managers' forum. The group has already said it likes Palin's plan, but the rural utilities have different needs, said Jim Posey, manager of Anchorage's Municipal Light and Power and chairman of the statewide forum.
"We're going to weigh in to help the rural areas," Posey said. "This is not about handouts. This (cost increase) is driving businesses out and driving people out of the communities."
A direct subsidy to fuel suppliers would solve a cash-flow problem and give immediate help to the cash-strapped utilities, Kohler said. That's preferable to the governor's plan, which would provide a 60 percent rate subsidy to utilities, but only after a lengthy regulatory process to approve new rates, Kohler said.
The proposed fuel subsidy would kick in only when power-generation costs reach a certain level. That means Railbelt consumers, who receive cheaper electricity from natural gas and hydro, would not see a change in their electric bills.
But everyone would benefit from the other half of the AVEC proposal, which would pay similar subsidies to fuel providers to bring down the cost of gasoline at the pump.
Rural subsidy
As welcome as $1.70 signs would be at gas stations, however, they would surely be controversial among advocates of fuel conservation. Haagenson said one strong criticism leveled already at the Palin proposal is that the debit cards would promote more consumption of oil products.
Kohler estimated the cost of AVEC's proposal for utility subsidy at $320 million. She did not have an estimate of the cost of the gasoline subsidy. Palin has proposed to spend $1.2 billion on utility assistance and its $100-a-month debit cards for energy assistance.
The state already has one subsidy program for rural electricity, known as the Power Cost Equalization program. But it's not built to keep up with the current rise in prices.
The PCE program was created when the state was pouring hundreds of millions of dollars into hydro projects and transmission lines to serve urban Alaska. The Legislature provided $28 million for the rural program in the coming year.
PCE provides a partial subsidy for residential power until the cost rises above 52.5 cents per kilowatt hour. Above that, consumers pay all of the additional cost. Since rural prices are already at or near that threshold, the rate increases from this year's fuel price hikes will be borne fully by consumers, without further help from PCE.
In Ruby, for example, PCE pays 17 cents out of the total cost per killowatt hour of 94 cents. That compares to 9 to 13 cents paid by Anchorage consumers without the subsidy. And the Ruby price is about to go higher, with the new fuel costs.
"It's going to go over a dollar, easy," said Sweetsir.
The long-range hope is to develop alternative energy sources and other means of driving down the cost of delivering rural power, Haagenson said.
Community Discussion
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What is happening to the rural villages will soon be happening to Fairbanks.
Thousands have been leaving the villages, forever.
Too bad Alaska doesn't have hundreds of billions of dollars of resources so that we could improve the standard of living and quality of life for the people who live here.
Oh wait. You do.
Welcome to the crowd.
Yep! AVEC will be going around town disconnecting meters real soon, and then back to the stone age.
"Disaster" and "panic" combined with a state and federal bureaucracy that is bogged down without an energy plan;
sounds like a recipe for human misery.
Alaska's Constitution is real clear on the "shall" requirements for the protection of Health and Welfare of Alaskans. Maybe it is time we have leaders that can get something done before winter is upon us.
I'm turning blue holding my breath.
This is barely the icing on the cake! Wait till winter starts to set in, that same panic the villages are feeling will be felt here in Fairbanks in a scary way! When you call for heating oil and the delivered price is $4.60 a gallon and folks dont have the $500-$800 extra dollars they need to fill their heating oil tank with a months worth of oil, then what? Its gonna get real interesting up here in the coming year!
Village folk may may learn the true definitiion of "subsistent".
sub·sis·tence
Pronunciation: \səb-ˈsis-tən(t)s\
Function: noun
Etymology: Middle English, from Late Latin subsistentia, from subsistent-, subsistens, present participle of subsistere
Date: 15th century
1 a (1): real being : existence (2): the condition of remaining in existence : continuation, persistence b: an essential characteristic quality of something that exists c: the character possessed by whatever is logically conceivable
2: means of subsisting: as a: the minimum (as of food and shelter) necessary to support life b: a source or means of obtaining the necessities of life
— sub·sis·tent \-tənt\ adjective
I'm sure I'm beating a dead horse here...but didn't I hear an Idea .... something about the state buying the North Pole refinery (maybe use that Imminent Domain for something other than taking the average guy's house or property?), and then sell the gas and fuel at a discount to the local (and state) area's. And sell the surplus (at the market price) to the Fed's(Army and Air Force included), or out of state. Along with prison time and stiff fines to those who would try to circumvent the intent.
Comments? This is merely a kernal of an idea...but wouldn't it work? or why wouldn't it? Keep in mind, I don't object to everyone in the distribution chain to making a modest profit, but if they can buy cheap..then they can sell cheap,and keep the same profit they may be making now (Hey, we all have families). Another bottom line is...we (as citizens of Alaska), own the oil, don't we? and the small amount we take from the pipeline should be at cost, shouldn't it?
With all the oil income for the state,time to build the rampart dam !!!!we could sell our electricity overflow to the lower 48 and have two incomes for the state, plus 15.00 electric bill for the people of the state.
We can pretty much guarantee that all this construction going on in Fairbanks will be for nothing if fuel prices don't start coming down soon. How can these new businesses thrive if the population won't be able to support them because people will be leaving Fairbanks not to mention the rest of the state? The cold and darkness are bad enough during the winter but add outrageous fuel costs? That's going to the the final straw that breaks the camel's back for lots of folks. This is going to ruin economic stability in this state.
If you buy gasoline in Baghdad, it was probably refined in Texas.
The Bogus War on Terra gobbles up a hideous amount of hydrocarbons, and provides absolutely nothing in return.
The rug in the Oval Orifice is unraveling to expose the huge lump of scandal hidden under it.
The revelations of Scott McClellan are just the tiny tiptop of the tip of the biggest scandal in human history.
We don't have an Energy Crisis..
it's a Mental Health Crisis.
Everybody on the hydrocarbon chain is using it to extort money out of everybody else.
Wall Street Speculation..
Corporate Greed..
Stockholder Greed..
Carbon Taxes..
State & Federal Taxes..
Transport Tariffs..
Oversight, Rules, Regulations..
..it goes on forever, ad nauseum.
We should have abandoned the 19thCentury piston and crankshaft before the end of the last century.
http://seattlepi.nwsource.com/local/6420...
Yes, there are plenty of sources of alternate energy that can totally reverse the paradigm of energy scarcity worldwide.
It's scandalous Alaska is forced to be an African-Style resource extraction colony when a big percentage of Alaska's hydrocarbons are exported to be wasted elsewhere, such as: to power inefficient air-conditioners in Texas.
Yes there are other amazing sources of energy to be used, and not necessarily a dubious plutonium powered nuke-reactor from Toshiba either.
http://www.blacklightpower.com/
http://www.blacklightpower.com/Press%20R...
This year the biggest energy saving device you have is your computer...
READ READ READ
http://www.peswiki.com/index.php/Main_Pa...
READ READ READ
Why export a billion dollars worth of fuel because the State wants to make a million taxing it, when at the same time you are having to spend 2billion trying to compensate for not having access to your own local resources..
..if and when oil runs out, then the lawyers will go after your firewood like rabid brainless termites.
For a while WA-state was trying to figure out how to tax the tides for the state general fund in PungentSound even before the first viable tide turbines were built.
Why must Alaskans rely on 75% alternate energy, when the rest of the planet totally wastes what we export to them?
Are Humans making real-progess across the charts over the past 50years??
Nope, and probably for the same reason the opposite of Progress is> Congress.
suomi, right on !! I think that out-in-the-cold & fighter pilot have it
wrong, in a economic downturn certain of the poorest will be forced outof the villages into the Anchorage area which is the cheapest place in the state to live. There is no panic, people are not leaving in mass.Most will cut their overhead were possible & generally tighten their belts. OK, we're all have to do that.
griffin: "..cutting the overhead & generally tighten their belts"
SORRY, that has already been done in rural Alaska. Your "Economic downturn" in rural Alaska is more like the GREAT DEPRESSION. Suspect that Fairbanks will get the energy crunch this winter, for the "belt tightening & down sizing", if it isn't already impacting family budgets. Anchorage and Southeast hasn't tasted what the failed energy policies have to offer, yet.
Well hundreds of billions might be stretching the truth. That amount of power you in Alaska is mind boggling but still having to pay the most to get it and use it is a disgrace. Should be sent by Pipeline already, Gas also, Why not make a belt system to send the coal also? What's holding you back? (Everyone want a cut...) Transcanada sounds good but wonder if they aren't a already sweeting the pot with the other companies? Sending it the old fashion ways have proven to be problematic. Barge waste of time train takes to long in smaller amounts and fuel in both kills any profits. It's time to make a drastic changes on how to get what you want to send instead on using the older ways that use to work in the past. Before someone else makes the decision for you.
Humm good points if I was an Alaskan Native that lived in Alaska but I'm an Alaskan native that lives in Michigan. Here let's look at cost for a while gas prices everywhere cost monthly here in a 3 bedroom during the coldest months last year was dec-mar cost per month was about 450 up 150 from last year. Gas prices have stayed about 3.75-4.05 so far. But I do see why Alaskan should be mad I would also!
First prices 450/month was natural gases. 3.75-4.05 was vehicular gasoline.
"Or is the real problem, some of you have spent and bought to the max and now this increase in oil and gas have made you realize you do not have the income to buy fuel and pay the bills and mortgage. These are the people who will need to make the decision, because the help they really need is not going to happen."
Yeah who doesn't plan financially on having their heating oil bill double in one winter and triple in 3 years not to mention watching your electric bill increase by %50 in fuel surcharges in 2 winters, geez.....irressponsible people, actually trying to progress their quality of life as they mature and purchasing a home. All the while not having a palm reader predict a complete failure of the life blood of the combustion engine while living in a sub zero climate! Nobody would have thought 3 years ago that your heating oil and electric bill would equal 60-100% of your Mortgage me thinks???
Good point here in Michigan heating oil in cites stopped a while ago even trailer homes are attached to large gas tanks. Heating oil isn't used much anymore that I've seen. Think it most stopped using it back in the 90's But everyone that uses gas will have to change the furnaces. But most are cost effective now with digital thermometers to cut budgets. (I don't have one yet.)
But I do understand why you would be upset and unlike others that just want production I care because it was home. Electricity here $89 dollars a month with a winter help plan that helps pay of what might be used during the winter but the price is paid every month and never changes unless I get above the budgeted plan. They can not turn it off if it was piad in full before the winter months.
I might add that the cost of living here with my familiy total income or just 1200/month.
The last time I checked with some friends who are there now (Iraq, that is)...Gasoline at retail is under a $1.00 a gallon...same under a buck a gallon in Iran (and they are supposed to on gas rationing).
Hummm, interesting to say the least...update: That info was nearly three weeks old...sorry.
You really need to know what's holding you back try youtube then put Alaskan Oil into the search. There's a 25 min. video there that tells you what's happening. There is a surplus with Canada, Also there is a nuclear plant that produces electricity that gives a credit just for us to use it. Africa is in the same boat they have problems with Greenpiece and other environmentalist groups try to lock others in their sinister means.
Edlw Did i say I lived in Iraq?
I really feel for those that will need to fill up 55 gallon drums with fuel to go to fish camp.
I remember fuel being high enough and totally prohibitive when I lived in Bush communities in years past.
AS long as the oil companies hold us hostage there's not much chance of relief for us - and gee haven't some of them been posting record quarterly profits in the BILLIONS! Those of us that remember price controls in the early 70's remember how, when the controls were lifted gas prices rising steadily.
For the comments on the price of gas in Iraq - yes I saw the "low" prices there first hand but...considering the fact that many Iraqis I knew made anywhere from $30.00 and month to $100.00 dollars a month.
The poor are not the ones that need to worry. They already have low-income housing, Medicare, $1 a month cell phones, energy assistance, weatherization programs and food stamps. It is the middle class that is the lifeblood of the economy that are going to suffer. It is getting to the point where if you can't make $60,000 you are better off suckling up to the government instead of working.
I can't wait till this winter when the borough tries to ban wood burning at 40 below. The latest web poll at fairbanksgas.com shows over 80% of the respondents plan on burning wood this winter to reduce fuel costs. Firewood and woodstove sellers can not keep up with the demand. Hundreds of people are buying wood and coal boilers to completely eliminate the need to burn heating oil. There will be riots at the borough building if they attempt to enforce a burning ban when the next best alternative costs 500% more.
I live in Michigan what are you talking about? Edlw?
A little reality check here -
Let's see....today's propane delivery: $3,665. But that's okay - it should last me a few months. Great!
Last month's electricty bill. Oops, not in yet. But since April's rate was $2.25/kWh, May's shouldn't be more than, oh, $2.85.
You rattleboxes in Fairbanks haven't the SLIGHTEST idea of what high energy prices are. But I'll give you a taste: take your monthly electricity bill. Now, that check you write, every month? Go and write it out, every two days. Weekends, holidays, and all. Every TWO DAYS.
Really a suckling pig would make comments like that. But as you think you better then other as you seek work daily I'd be mad also. This will not take long for everyone to see what's happened. I am Alaskan Indian and your comments never need consideration foodstamps and free things you've talked about where never made. Laughably you'd put it on Native Americans where you dweel no matter where you live. But still I thought I would think I'd help others learning what others pay I never wanted to throw you face in the dirt. Some ask for it.
Last comment if things are bad it's only going to get worst. The power in Alaska has to make something happen quickly like now might be to slow. I don't care how much you make it's not enough 12000 60000 it's not you'll see you have to make it right and now if not you'll pay and pay and pay. Get your cut now right now if not you'll might not ever get it. You cut 10 percent from the line!!!!!
Athabaska's aren't afraid of this thought we'll never stop thinking of linking a 2 percent link one what your so mad about. It's only 2 pecent on what's sent 2 percent of 100 million per day might be a little costly. Think food stamp where a problem.....there might be many others.
Fairbankgas what are you talking about? Low cost cell phone? Free food? Low cost health care? Really where here in Michigan? You must be an export tho. Where can I get these freebies? I'd love to know. But you know you'd know it's not all possible. Here's the freebie work for two months then you might not ever ask for it. There's you food stamp and health care help you think we get in you imagination.
But remeber as a low life American that hold right to there Fairbanks might go. I can't see why I'd care. But sure a couple might find out. Not really worth caring about like everyone else isn't earthier.
The real cure to the higher fuel prices is sustainable retreat from our current fossil fuel consuming activities. Of course, this is definitely way out of reach for the general populace since it is difficult to give up a "gas hungry" lifestyle. I propose one or more of the following ideas: 1. Live closer to work. 2. Work 4 days a week. 3. Take fewer holidays. 4. Keep the thermostat setting down. 5. Live in smaller spaces. 6. Use energy efficient home appliances. 7. Get rid of your gas guzzling vehicles (if possible) and buy a hybrid vehicle. 8. Buy a mountain bike and use it liberally for transportation. 9. Walk, walk, walk. 10. Give these a try and be happy.
Regretably, some day soon there won't be any choice to the matter. In China, the government has a laundry list of environmental disasters to deal with as a result of their exploding human consumptive needs and they claim there's nothing they can do it about it. Why? Because if they stop squeezing the earth for resources, Chinese society will lose their current quality of life and chaos will ensue. I believe a "green" lifestyle is also high quality, challenging, and fun, but very different. Why not give it a try?
There are many reasons why the state and the federal government should be more responsible for this situation. Native people have not received the same level of consideration as many other citizens of this country. Alaska has the least roads and highways developed than any other state. This keeps access to extremes thus forcing Native people out of their heritage lands. Allowing this to continue is wrong.
Now the Oil companies hide behind the idea that high demand is what is driving up gas prices. Well if that is true then we as a country will have to start making some serious decisions such as adopting the 55 mile an hour speed limit, of taxing luxury uses of fuel such as racing. I know this sounds extreme and many will hate this idea, but is racing really as important as a human life? Is it worth human lives to waste fuel on luxury uses?
And that's really what this boils down to, there are still people in this county who believe that Native Americans are still not people. If Native people leave their heritage lands then the government or other non-native people will try to swoop in and steal these lands, that is what must be prevented.
Instead of telling Native people to just move away from their lands and deal with it, this state and this country should be answering the question how could you let things go this far? Energy policies are going to cost lives. Human lives. Native Lives.
Tax the non-essential uses of fuel, ticket people who speed, and let the proceeds help fund relief to remote Native people forced to adopt western economies without the resources (such as roads) to develop their own strong local economies, and keep them from leaving their heritage lands and losing them to dishonest government or land grabbers.
Ok I'd understand if you owned the land. But really do they own it all of it not really! Corps own the sub below it. Then just above it? We really need to tell them the truth they own nothing. They have happily paid taxes on land they'd never own? How can they own what was made before they where here? Like so many here and there you can't own what was never yours. There's the problem.
I say scrap the plans to build the fish hatcheries in Fairbanks which was bid @ $45.6 million and the one in Anchorage which will cost $100 million and subsidize heating oil and electricity throughout Alaska that matches the cost of Anchorage using OUR natural gas from the Cook Inlet area.
"The real cure to the higher fuel prices is sustainable retreat from our current fossil fuel consuming activities. Of course, this is definitely way out of reach for the general populace since it is difficult to give up a "gas hungry" lifestyle. I propose one or more of the following ideas: 1. Live closer to work. 2. Work 4 days a week. 3. Take fewer holidays. 4. Keep the thermostat setting down. 5. Live in smaller spaces. 6. Use energy efficient home appliances. 7. Get rid of your gas guzzling vehicles (if possible) and buy a hybrid vehicle. 8. Buy a mountain bike and use it liberally for transportation. 9. Walk, walk, walk. 10. Give these a try and be happy."
1. Live closer to work....Like most have a choice?
2. Work 4 days a week......oh I am sure employers will be up for that
3. Take fewer Holidays.....?????dont even understand what that means
4. Keep the thermostat down.....like we have a choice when your paying $4.60 a gallon
5. Live in smaller spaces....what abandon your home and build a shed??
6. Use energy efficient appliances......as if most folks can afford to buy more even more expensive appliances with their increased living costs drowning them
7. Get rid of your gaz guzzling vehicle....what about the thousands upon thousands you'll lose in the transaction
8. Buy a mountain bike and use it liberally.....that will be a bitter cold ride to work bordering on life threatening and not sure the kids will survive that ride to school
9. walk, walk, walk.........see number 8
10. Happiness needs to be better defined!
How's about we stop preaching green, pull our heads out of our A$#'s and use the resources readily available to us in our own soil and our own oceans instead of importing everything and being soley dependant on everyone else for everything! The lack of supply idea that is fueling these ridiculously high prices that are threatening our society and its economy as we know it arent because theres not enough oil. Its just that if your the only one selling it you can sell it for whatever you want and tell the buyers the reason its so high is whatever reason you want to tell em. ANWR will not be very sacred when no one can afford to travel to it, as if its sacred now! The sad truth is that our government and its leaders have failed us in ways that are too vast to list! We have become the worlds superpower thats so pathetic it cant wipe its own nose without paying someone else to do it, and then it has to be done in an environmentally friendly way!.
Ive said it time and again, and I dont plan on quitting.
1. The govenor declares a state-wide energy disaster.
2. All oil refined for use in the state is sold to the refineries at a fixed cost, allowing for production costs of both the oil companies and refiners. Im sure $25-50 barrel is plenty more than needed.
3. If BP or Exxon doesnt like it, run them out of the state.
ITS OUR OIL
I live in southern Illinois (alaska 1966-1969). We have $4 a gallon gas and our food prices are really climbing.... however the real whallop I don't think has come. The ripple effect of people deciding to pay for gas instead of renting a few movies, going out to eat, or using a few extra dollars to put items in the food pantry cart at the super market is going to dry up.Small businesses are going to fail because people are just not able to afford anything extra. Of course then will come the lay-offs. I read what is happening in the bush as well as what Fairbanks is expecting as a warning for what will happen in the outside.
I am not sure why rural villages would even worry about rising fuel prices. From everything I have read on these comment forums most Native Alaskans want to go back to the old ways and traditions anyway. They have been here 30,000,000,000 years and never worried about trivial things such as electricity and fuel back in the day, did they?
Therefore, to help those of us who enjoy the western lifestyle, village elders should discontinue fuel shipments to the villages and route them to my house. The federally subsidized air transport and postal service to the villages should also be stopped since planes use fuel and don't readily fit in to the subsistence lifestyle.
Would be a great learning experience for your future generations!!
Ways of life have changed. Native people are trying desperately to hold on to their heritage while at the same time they have dealt with the influence both positive and negative of western society. So it's complete nonsense to say just 'let em go back to their previous way of life.' People now are dependent on things like electricity and fuel for their way of life. Most villages depend on hunting and fishing yes, but now in order to make hunting and fishing pay off they need boats and atv's to be able to bring in the numbers needed to make some money in addition to provide their own resources. This isn't the fault of Native people, it's the fault of having a western lifestyle forced onto them.
Native people need to be able to send kids to school for education so they can get jobs. Native people need to build economies in their villages so they can stay in those villages. But resources such as road development have been withheld from villages probably as part of a long term plan to continue to steal lands and displace Natives.
Further more instead of only talking about ways to conserve individual use of fuel, why aren't we talking more about stopping the ways in which fuel is wasted such as racing? How much fuel is wasted on 50 cars racing around a track for 200 laps? and the support vehicles? How much fuel is wasted because we haven't re-adopted the 55 mph speed limit again? How much fuel is wasted because the administration is still setting it aside in oil reserves? The question isn't why don't Native people change, or even why don't individuals conserve, the question is why isn't the government taking the lead in addressing either the waste of fuel or dare I say taxing the Oil companies? These proceeds could be used to develop western highways in the State of Alaska making villages more accessible to creating their own local economies.
Oh and people are facing the Highest costs in the nation in these villages. Things are not free. That is complete ignorance.
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